Riders face possible cut in transit savings

December 17, 2013|By Jon Hilkevitch | Tribune reporter

CTA, Metra and Pace riders who save hundreds of dollars a year by using pre-tax income to pay their fares could see big cuts in how much money they can set aside for commuting in 2014, transit officials said Tuesday.

Participants in the transit benefits program can currently shield up to $245 per month from federal taxes to purchase transit fares and passes. But it will drop to a maximum of $130 per month starting in January, unless Congress renews legislation set to expire on Dec. 31.

Meanwhile, the monthly tax benefit for drivers who pay for parking as part of their work commute will automatically increase by $5 next year, to a limit of $250 per month.

Public transit advocates are urging riders to contact their representatives in Congress and urge the passage of legislation pending in both the U.S. House and Senate that would preserve the parity between the tax provisions for transit users and the benefits for parkers.

“This (decision) will have a big impact on our region’s transit riders,’’ said Leanne Redden, senior deputy executive director for planning at the Regional Transportation Authority. “We have been working with the Illinois delegation and we encourage people to call their congressman and say they support transit parity.”

Metra monthly pass customers who make long commutes would be among the hardest hit by a reduction to $130 a month in the transit benefits program limit. A Metra monthly pass for the C zone costs $121. All other distance-based zones are higher than $130, ranging up to $263.50 for a monthly pass extending to the M zone.

The transit benefits program can help cut commuting costs by hundreds of dollars a year, according to the American Public Transportation Association, which represents public transit agencies in the U.S.

In the Chicago area, workers whose employers participate in the program can direct pre-tax income to be used on the CTA, Metra, Pace, the South Shore Line, Amtrak, for van pool trips and commutes that include riding aboard downtown water taxis, as well as for parking. The only restriction is that the travel is related to going to work and back.

“Reducing the benefits for public transit riders at the same time that this tax benefit is adjusted upward for auto drivers diverges from a balanced federal tax policy that treats different modes of travel equitably,’’ the association said.

The transit benefits program is managed through a number of different third-party administrators in the Chicago region. The RTA transit benefits program has about 2,000 companies and about 50,000 employees enrolled, according to the RTA.

There are about 1,200 employers and about 44,600 employees in the new CTA Ventra transit benefits program, according to the CTA.